The California Public Utilities Commission (CPUC) has been the driving force behind the demand response program. In December 2014, the commission issued a decision (D 14-12-024) that mandated the three utilities to design and implement a DRAM pilot program during the 2015-2016 timeframe.

As PG&E describes it, the DRAM is a pay-as-bid auction of monthly system resource adequacy (RA) associated with a demand response product located in the utilities’ service areas and where sellers will offer directly into the CAL-ISO day-ahead energy market. The IOUs only will acquire the third-party demand response aggregators’ RA and will have no claim on revenues that the winning bidders may receive from the CAL-ISO energy market.

From the first DRAM RFO, PG&E expects to contract for at least 10 megawatts (MW) of demand response resources – with 2 MW or more coming from residential customers. Submissions for this RFO will be accepted until October 26. PG&E currently plans to hold the RFO for the second phase of the DRAM pilot in February 2016.